Twitter Inc (NYSE:TWTR) has reportedly held talks with the Chinese owner of video sharing app TikTok over a possible tie-up, potentially precipitating a bidding war with tech giant Microsoft Corp (NASDAQ:MSFT).
According to sources in a Wall Street Journal report, Twitter has approached TikTok’s parent company ByteDance expressing interest in purchasing its US operations as the app comes under pressure from accusations that its data can be accessed by the Chinese government for use in intelligence gathering, a claim TikTok has denied.
Last week, US president Donald Trump ordered American firms to stop doing business with TikTok within 45 days, stipulating that any deal to sell off the US arm of the app must be concluded before the deadline of September 15.
The US government has also announced a similar ban against Chinese messaging and social media app WeChat.
While Twitter may be a possible suitor, it remains to be seen whether the platform will be able to afford to buy TikTok’s US arm, with its own market cap of around US$29bn dwarfed by Microsoft’s US$1.6 trillion.
Discussions over the future of TikTok also come amid a wider confrontation between the US and China as diplomatic relations between the world’s two largest economies deteriorate amid accusations of human rights abuses, industrial espionage and disagreements over trade.
Last week, the US government also placed sanctions on eleven individuals it accused of playing key roles in the erosion of democracy and human rights in China’s supposedly autonomous Hong Kong region.
Shares in Twitter were up 4.4% at US$38.85 in pre-market trading in New York on Monday, while Microsoft was down 0.4% at US$211.60.